The Condominium Corporation
Learn about the condominium corporation under RA 4726. its purpose, membership rules, management powers, term, and the strict conditions for its dissolution.
Purpose & Automatic Membership
“Whenever the common areas in a condominium project are held by a condominium corporation, such corporation shall constitute the management body of the project. The corporate purposes of such a corporation shall be limited to the holding of the common areas, either in ownership or any other interest in real property recognized by law, to the management of the project, and to such other purposes as may be necessary, incidental or convenient to the accomplishment of said purposes. The articles of incorporation or by-laws of the corporation shall not contain any provision contrary to or inconsistent with the provisions of this Act, the enabling or master deed, or the declaration of restrictions of the project. Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable separately from the condominium unit of which it is an appurtenance. When a member or stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the condominium corporation.”
What This Means
The condominium corporation has a limited, specific purpose: hold common areas and manage the project. It cannot engage in unrelated business activities. Membership is permanently tied to unit ownership. you cannot sell your corporation membership separately from your unit, and you cannot be a member without owning a unit. When you sell your unit, your membership automatically terminates and transfers to the buyer. The corporation's articles and by-laws cannot contradict the Condominium Act, the master deed, or the declaration of restrictions.
- Purpose is LIMITED to: holding common areas + managing the project
- Cannot engage in activities unrelated to condominium management
- Membership is INSEPARABLE from unit ownership
- Selling your unit = automatically losing your membership
- Articles/by-laws cannot contradict RA 4726, master deed, or declaration of restrictions
Real-World Scenario
A condominium corporation's Board proposes to use the corporation's funds to invest in a restaurant business on the ground floor commercial space, arguing it will generate income for the building. Some unit owners object, saying this is beyond the corporation's powers.
Can the condominium corporation operate a restaurant?
Corporate Term & Common Area Protection
“The term of a condominium corporation shall be co-terminus with the duration of the condominium project, the provisions of the Corporation Law to the contrary notwithstanding.”
What This Means
Unlike regular corporations which have fixed terms (typically 50 years, renewable), a condominium corporation exists for as long as the condominium project exists. This overrides the Corporation Code. the corporation cannot expire while the building still stands and functions as a condominium. This prevents a dangerous scenario where the corporation expires, leaving common areas without a legal holder or management body. The corporation also cannot voluntarily sell common areas without unanimous approval (Section 16).
- Corporation term = same as the project's duration (no fixed expiry)
- Overrides the Corporation Code's term limits
- Corporation cannot expire while the condominium project still exists
- Protects continuity of common area management
- Cannot sell/dispose common areas without ALL stockholders'/members' approval (Section 16)
Real-World Scenario
A condominium corporation was incorporated in 1980 with a 50-year corporate term. In 2030, the corporate term expires under the Corporation Code. The building is still in good condition with active unit owners. The Board asks: does the corporation need to renew its registration?
Does the condominium corporation expire in 2030?
Dissolution of the Condominium Corporation
“A condominium corporation shall not, during its existence, sell, exchange, lease or otherwise dispose of the common areas owned or held by it in the condominium project unless authorized by the affirmative vote of all the stockholders or members.”
What This Means
The common areas are heavily protected. The corporation CANNOT sell, lease, or dispose of common areas unless every single stockholder or member votes in favor. unanimity is required. This is stricter than typical corporate decisions which usually require only a supermajority. The protection ensures that no Board decision or majority vote can strip unit owners of their common area rights. Voluntary dissolution requires either unanimous consent (Section 14) or the same strict conditions as partition under Section 8 (damage, obsolescence, condemnation).
- Selling/leasing common areas requires UNANIMOUS vote (all members)
- Supermajority is not enough. every single member must agree
- Voluntary dissolution: unanimous vote OR Section 13 conditions
- Section 13 conditions mirror Section 8 (damage, 50 years, condemned)
- Upon dissolution, common areas are transferred pro-indiviso to members
Real-World Scenario
A condominium corporation Board votes 85% to lease the building's rooftop common area to a telecom company for a cell tower, with rental income to be shared among unit owners. 15% of members disagree, saying it will affect their health and property values.
Is the 85% vote sufficient to lease the rooftop?
Frequently Asked Questions
Can I be a member of the condominium corporation without owning a unit?
No. Section 10 states that membership "shall not be transferable separately from the condominium unit" and that when a person "ceases to own a unit... he shall automatically cease to be a member or stockholder." Membership is permanently tied to unit ownership.
Can the condominium corporation expire like a regular corporation?
No. Section 11 states the corporation's term is "co-terminus with the duration of the condominium project, the provisions of the Corporation Law to the contrary notwithstanding." It exists as long as the building functions as a condominium, regardless of what the articles of incorporation say about corporate term.
Can the condo corporation Board decide to lease common areas to a business?
Not without the unanimous vote of ALL members. Section 16 requires "the affirmative vote of all the stockholders or members" for any sale, exchange, lease, or disposal of common areas. The Board alone cannot make this decision, and even a supermajority vote is insufficient.